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Chefs' Warehouse's (NASDAQ:CHEF) Stock Price Has Reduced66% In The Past Year

Simply Wall St
·3 min read

Taking the occasional loss comes part and parcel with investing on the stock market. And there's no doubt that The Chefs' Warehouse, Inc. (NASDAQ:CHEF) stock has had a really bad year. To wit the share price is down 66% in that time. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 24% in three years. The silver lining is that the stock is up 4.3% in about a week.

Check out our latest analysis for Chefs' Warehouse

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last year Chefs' Warehouse saw its earnings per share drop below zero. Some investors no doubt dumped the stock as a result. We hope for shareholders' sake that the company becomes profitable again soon.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
earnings-per-share-growth

This free interactive report on Chefs' Warehouse's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Chefs' Warehouse shareholders are down 66% for the year, but the market itself is up 18%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3.8% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with Chefs' Warehouse (including 1 which is makes us a bit uncomfortable) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.